http://www.theaustralian.com.au/national-affairs/nbn-chiefs-silent-on-scandal-at...THE top two executives at the National Broadband Network did not raise an ongoing corruption investigation into their former employer before taking jobs to run the $36 billion project - and the government never asked about it.
When former Alcatel-Lucent executives Mike Quigley and Jean-Pascal Beaufret were appointed to the NBN Co by Communications Minister Stephen Conroy in mid-2009, the US Securities and Exchange Commission was several years into a five-year probe into bribery allegations against the French telco giant.
But the federal government has now admitted it had no idea Alcatel-Lucent was the subject of a major US government investigation, and that Mr Quigley and Mr Beaufret did not raise it, although both later denied any involvement or knowledge of the scandal. In December, Alcatel-Lucent was fined $US137 million after the SEC accused it of paying more than $US8m in bribes between 2001 and 2006 to government officials in Latin America and Asia to win business.Mr Beaufret, now chief financial officer of NBN Co, had been chief financial officer at Alcatel and then Alcatel-Lucent between 2001 and 2007. Mr Quigley, executive chairman of NBN Co, was appointed president and chief operating officer of Alcatel in 2005.
Both Mr Quigley and Mr Beaufret said they had no involvement in the matters subject to the SEC's complaints and were not interviewed in relation to the SEC investigation.
In response to Senate estimates questions raised by South Australian Liberal senator Simon Birmingham, who has been pressing the government on the issue, the government said neither men had disclosed that information."Mr Quigley and Mr Beaufret did not declare the investigation at the time of appointment to NBN Co as neither were questioned as part of the investigation," the government said in a statement.
Asked whether the federal government believed it should have inquired about the investigation before appointing the men, a spokeswoman for Senator Conroy said Mr Quigley "has been clear" that neither he or Mr Beaufret had "any involvement in the matters" raised by the SEC.
"In fact, the actions of a number of individual Alcatel-Lucent employees detailed in the SEC's statement fell outside the accountability and jurisdiction of both Mr Quigley and Mr Beaufret," she said.
The SEC has alleged Alcatel "lacked sufficient internal controls" to prevent bribes being paid and "improperly recorded the payments in its books" during the 2001-06 period.
In response to questioning, the federal government said Mr Beaufret as chief financial officer was in charge of NBN Co's internal controls and financial governance.
When questioned as to how it was comfortable with Mr Beaufret's past as chief financial officer of Alcatel, the government said Mr Beaufret was appointed to NBN Co "due to his skills, previous experiences" and "ability to perform the duties of CFO to a high standard".
In his role as NBN Co chief, Mr Quigley was paid $1.86m for the 2009-10 financial year. Mr Beaufret's salary was not disclosed.
Mr Quigley and Mr Beaufret's past connection to Alcatel-Lucent has stirred controversy, with NBN Co in June last year awarding a tender to Alcatel-Lucent for supply of NBN electronic components.
The French-based multinational will be paid $70m to fulfill the first part of the contract but that figure could reach $1.5bn if Alcatel-Lucent can meet supply demands.
"Neither Mr Quigley nor Mr Beaufret played any part in the decision making process at NBN Co which led to Alcatel-Lucent being selected as a supplier to the company," a spokeswoman for Senator Conroy said.
Opposition communications spokesman Malcolm Turnbull said it was "remarkable" that Mr Quigley and Mr Beaufret had not raised the bribery allegations.
"It is remarkable that Mr Quigley and Mr Beaufret apparently did not consider a bribery scandal involving their previous employer was a matter they should raise with their future employer," Mr Turnbull said. "Exactly what roles did Senator Conroy and former prime minister (Kevin) Rudd play in this utter failure of due process?"
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